released fri:Harletys released the following research...

released fri:

Harletys released the following research recommendation on Friday on JML with a [COLOR=green]BUY[/COLOR] (can't believe they're using long term forecast of $1 US per lb of copper).

Jabiru Metals Limited (“Jabiru”, “JML”) has released positive results from
the recently completed Jaguar base metals deposit Bankable Feasibility
Study (“BFS”). The BFS has assumed a mining rate of 350ktpa at a high
grade of 8.7% Cu Equivalent (“CuEq”) over a six year period. The
successful outcome from the BFS will now allow the company to finalise
offtake agreements and project financing. Development of the project is
expected to commence in the second quarter of 2005.
Jaguar Cu-Zn-Ag Deposit (JML 100%)
• The BFS has defined a mining reserve of 1.65Mt at 2.86% Cu,
11.23% Zn and 114g/t Ag from a global resource of 1.89Mt at 2.75%
Cu, 10.22% Zn, 108g/t Ag. An additional 239kt of lower grade
stockpiled resources from the Teutonic Bore mine will be used to
commission the processing plant
• The reserve grades equate to 8.7% CuEq (using our long term price
forecasts of US$1.00/lb Cu, US$0.45/lb Zn and US$5.00/oz Ag)
• The reserve estimate generates a mine life of 6 years with a design
throughput of 350ktpa. Mining is planned to be via conventional
longhole retreat mining with an underground crushing system feeding
a conveyor to the surface processing infrastructure
• The study indicates that the project generates cashflow of A$64.7m
with a Net Present Value (“NPV”) of A$41.4m using a discount rate of
7.5% and an Internal Rate of Return (“IRR”) of 35.3%. The NPV
equates to 33cps (pre-financing)
• Copper cash costs (after by-products) are anticipated to be
US$0.12/lb, placing the operation in the lowest cost quartile when
compared to other global copper projects
• Significant potential exists within the mine environ to increase
resources which could ultimately lead to an extension of the mine life
Teutonic Bore (JML 100%)
• Numerous geochemical and geophysical targets are planned to be
tested over the coming 12 months
Summary
The base case BFS results for the Jaguar deposit have now been
announced and indicate a highly robust operation. The base case NPV
of $41.4m equates to 33cps (pre-finance). Although the base case NPV
is some 35% less than the estimate from the original pre-feasibility study,
mainly due to higher contractor rates, the robustness of the project is due
to the exceptionally high grade nature of the polymetallic deposit. Initial
modelling indicates that the share price of the company is sensitive to
issuing additional equity. Therefore, the final valuation will be dependent
on the ratio of debt-to-equity funding. An updated valuation will be
conducted when the method of funding is finalised.
Based on the positive results of the BFS and the significant prospectivity
of the tenements around Teutonic Bore, we have upgraded our
recommendation on Jabiru Metals Limited to a Buy.